Copper is at its lowest point in over a year. Gold is trading at its lowest this year, while the yen is also trading at its lowest point in 2018. What do all these signs mean? Chinese manufacturing numbers for the month of June were soft. Europe and the U.S. are not experiencing the core inflation that they'd like to. Taken all together, this could mean one of two things. Either the global economy is in for a major sell-off on lower real demand for the foreseeable future or the risk appetite of investors is growing in the face of global uncertainty.

Copper, unlike gold, isn't just a valuable metal. While gold also has some industrial applications, copper only has industrial applications. The price of copper is bell weather for the future of economic growth. If sales are slow and manufacturing is about to drop-off a cliff, manufacturers will stop the purchase of base metals necessary to produce products. This is what is happening now. Copper is falling as fears over increasing rhetoric around trade wars is picking up. Manufacturers fear being oversupplied and aren't willing to risk waiting for the actual recession to show up. This pattern of a drop in copper preceded the 2008 economic crisis in very much the same way.

So why is gold also falling if a recession is imminent? The safe haven metal is joined by the safe haven currency, the Japanese yen, in its recent decline. A drop in these safe havens implies that markets are very much "risk-on" and are betting for a turn around, while real markets discount a strengthening of demand. Financial markets generally lead real markets; therefore, perhaps investors dismiss the trade-war rhetoric altogether and believe everything will be "okay," but recent developments make that hard to believe.

U.S. President Donald Trump commented Wednesday morning that Germany "is totally controlled by Russia" and that Germany's purchase of energy from the Russians was bad for NATO and that NATO countries were not spending two percent of their GDP on defense as the alliance members have historically agreed to do. Apparently, Trump is repeating the criticisms he lobbed at U.S. allies most recently at the G7 summit in Canada. Whether he is doing so for the benefit of the cameras airing his comments or not is yet to be seen.

German Chancellor Angela Merkel responded quickly to Trump, saying that she knew all too well what Russian control looks like - having grown up in occupied East Germany - and that Germany was a sovereign country doing what is best for Germany, including signing a pipeline deal with the Russians. As for the 2 percent target, Germany is already hitting those targets and is the second largest supplier of troops to joint NATO missions argued Merkel, who was seemingly surprised by Trump's impromptu criticism of Germany.

Trump will meet Russian President Vladimir Putin next, and his tone will most likely be much softer than it has been with Merkel and other NATO allies. Is this some sort of grand strategy to improve the U.S. economy? Threatening trade wars with China and the EU, while simultaneously cozying up to Russia? Perhaps, but the endgame is not very clear.

This week also saw the departure of U.K. Foreign Secretary Boris Johnson who has argued for a hard Brexit and has criticized the Theresa May government for too soft a Brexit. Very Trumpian in his comments, Johnson's arguments for more trade barriers makes little sense to an economist from the outside looking in, but I'd wager this was all a step by Johnson on his planned ascent to become the next U.K. Prime Minister.

Taken as a whole, the dropping off of commodity prices with the drop in safe haven investments will end in a disaster I'm afraid. The Great Recession will return. Income inequality will only be exacerbated and the second shoe will fall much harder unfortunately. How central banks will manage the fallout from this new recession is anyone's guess, but my recommendation would be to move into safe bets and go risk-off.